Against All Odds: Investor Protection in Italy and the Role of Courts

The dualism between private and public enforcement of investor-related rights and its influence on the development of capital markets has drawn the attention by much of recent commentary. While opinions differ as regards preference for private or public enforcement, scholarly analysis has so far been focused on the principal-agent relationship between investors and issuers, and has tried to depict the most effective enforcement system from a deterrence perspective. In this article we present some data about the Italian experience of enforcement. Rather than of lawsuits against issuers or gatekeepers, investor protection in Italy is mostly the result of proceedings brought by individuals against investment services providers. Does such a model promote the public goals of securities regulation? Is it efficient? By answering these questions, we aim to show how the Italian experience may contribute to the international debate on the enforcement of securities regulation.